1) US Feraheme sales at yr 5 = $1.2 billion
2) Market cap sales multiple (2.5 x sales) = $3 billion
3) Shares outstanding 17,000,000
4) Label = full spectrum CKD
5) Reimbursement = temporary J code, mid-margin reimbursement dialysis chains and institutions
6) Price = $1.3 Bil x 2.5 mult divided by 17 mil share float = $177
7) For emphasis: Price per share = $177
Conservatively does not include:
1) ROW sales for Feraheme
2) Revenue from imaging pipeline
Comments: A) This stock, in my opinion, looks like a strong candidate for a 2 for 1 stock split upon approval, and more likely, a 3 for 1. B) analysts are being very conservative in their projections -- it is a function of the small share float - you see the $55 per share price, and believe it is fully priced, when in actuality it just appears that way due to the paucity of shares. C) A typical baby biotech would have a share float of 60 million moving into commercialization. HERE IT IS 17 MILLION - TINY.
Bottom-line: $177 per share. Now, assuming a split 3:1, that would be $59 per share -- that doesn't seem far fetched. And, the share float at 3:1 = a paltry 51 million. If the stars and planets align here -- it may seem a stretch - but those are the calculations. These are the situations that get me going -- the analysts projections are way off. How can you value a company at $75 per share post approval, or $1.3 billion -- it would be trading for less than cash at peak. Please do your own DD -- just my thoughts.
The leading premise of this analysis is not supported by other estimates.
The current estimates for 2013/2014 US Feraheme sales on about $250M-$300M, not the $1.2B that "manhattan" surmises.
If we follow through his subsequent calculations of valuations, but using $300M rather than $1.2B in sales, then one arrives at a price target of only $45.
In other words, the point here is that barring more precise estimates of actual revenue growth, these simple calculations of share price value are worthless.
I like your analysis. But the real story short term is 25% of float is short and a FDA approval should poor gas on the fire of the shorts. Sure its market Cap is ahead of fair valuation, but I will be long gone by the time
sales have to justify the market cap. May want to consider some July 40 puts as downside insurance because if it fails FDA then this is going to 3
Not 3, but likely to the 20's or high teens. Remember that there are some very involved inst investors who have ridden the roller coaster this far. They have probably capitalized on the volatility despite their long positions.
Rah, rah rah. You are drinking the kool aid and smoking the pipe. Imaging pipeline isn't even a blip on the screen. Feraheme at $1.2B, what market share are you fantasizing about? Remember the composite payment system scheduled for Medicare? I really want to send you a hat with ears.
Stat: I wish you'd use your ears more than your mouth-maybe if we give YOU two sets of ears without the hat?----Naw!
Maybe the sales numbers are a little aggressive. Nobody can predict what will happen too far out. Lots can happen between now and then?
But an approval won't be part of the uncertainity IMO-there the STAT man is very likely wrong!
Seriously doubt I will be in this 2-3-5 years down the road. Doubt it will even be its own entity for long. It will be in someone elses portfolio of drugs.
Don't give a crap about the imaging side. That whole side industry is in serious flux over the next couple of years.
From another direction.
1) Today's market cap = $934 million
2) IF the share float were actually 60 million shares (instead of 17 million), then;
3) Today's share price would be $15.56. And, we would be talking about a post approval price near $30. Seem more reasonable?
This stock is going to split post approval. IMHO.